if the stock does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.

except where the person to whom it is sold or transferred is connected with F17the company which makes the sale or transfer, to be the amount (“the price actually received for it”) which is in fact realised on the sale or, as the case may be, which is in fact the value of the consideration given for the transfer; and

if F18that person and that company are connected with each other, to be what would have been the price actually received for it had the sale or transfer been a transaction between independent persons dealing at arm’s length.

F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

stock sold in circumstances in which the amount realised on the sale would be taken to be an amount determined in accordance with paragraph 5 of Schedule 5 shall be taken to have the value so determined, instead of the value for which subsection (1A)(a) or (b) above provides.

trading stock is sold or transferred to a person in circumstances where paragraph (b) of subsection (1A) above would apply (apart from this subsection) for determining the value of the stock so sold or transferred,

the amount which would be taken in accordance with that paragraph to be the value of all of the stock sold or transferred to that person is more than the acquisition value of that stock and also more than the price actually received for it, and

both parties to the sale or transfer, by notice signed by them and sent to the inspector no later than two years after the end of the F19accounting period in which the trade is discontinued, elect that this subsection shall apply,

the stock had, immediately before the discontinuance, been sold in the course of the trade for a price equal to whatever would be its value in accordance with subsection (1A)(b) above; and

the period for which those F12profits were to be computed began immediately before the sale.

they are connected with each other within the meaning of section 839;

one of them is a partnership and the other has a right to a share in the partnership;

one of them is a body corporate and the other has control over that body;

both of them are partnerships and some other person has a right to a share in each of them; or

both of them are bodies corporate or one of them is a partnership and the other is a body corporate and, in either case, some other person has control over both of them;

includes also any services, article or material which would, if the trade were a profession F23. . . , be treated, for the purposes of section 101, as work in progress of the profession F23. . . , and references to the sale or transfer of trading stock shall be construed accordingly.

if the work does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which would have been paid for a transfer of the work on the date of the discontinuance as between parties at arm’s length.

the amount (if any) by which the value of the work in progress at the discontinuance (as ascertained under subsection (1) above) exceeds the actual cost of the work shall not be brought into account in computing the F26profits of the period immediately before the discontinuance; but

the amount by which any sums received for the transfer of the work exceed the actual cost of the work shall be included in the sums chargeable to tax by virtue of section 103 as if it were a sum to which that section applies received after the discontinuance.

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F32. . . the period of two years beginning at the end of the accounting period in which the profession F32. . . is discontinued.

any services performed in the ordinary course of the profession F33. . . , the performance of which was wholly or partly completed at the time of the discontinuance and for which it would be reasonable to expect that a charge would have been made on their completion if the profession F33. . . had not been discontinued; and

any article produced, and any such material as is used, in the performance of any such services,

in a case where the same body of General Commissioners have jurisdiction with respect to F34each of the persons whose F37trade or profession is one of those concerned, the question shall be determined by those Commissioners unless all parties concerned agree that it shall be determined by the Special Commissioners;

in any other case, the question shall be determined by the Special Commissioners; and

the General or Special Commissioners shall determine the question in like manner as an appeal.

where the F44profits for that period were computed by reference to earnings, all such sums in so far as their value was not brought into account in computing the F44profits for any period before the discontinuance, and

where those F44profits were computed on a conventional basis (that is to say, were computed otherwise than by reference to earnings), any sums which, if those F44profits had been computed by reference to earnings, would not have been brought into the computation for any period before the discontinuance because the date on which they became due, or the date on which the amount due in respect thereof was ascertained, fell after the discontinuance.

sums received by a F48company beneficially entitled thereto F49which is not resident in the United Kingdom, or by a person acting on F50its behalf, which represent income arising directly or indirectly from a country or territory outside the United Kingdom, or

F51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

sums realised by the transfer of trading stock belonging to a trade at the discontinuance of the trade, or by the transfer of the work of a profession or vocation in progress at its discontinuance.

in computing for tax purposes the F44profits of a trade, profession or vocation a deduction has been allowed for any debt incurred for the purposes of the trade, profession or vocation, and

the whole or any part of that debt is thereafter released F42otherwise than as part of a F53statutory insolvency arrangement, and

the trade, profession or vocation has been permanently discontinued at or after the end of the period for which the deduction was allowed and before the release was effected,

any loss, expense or debit (not being a loss, expense or debit arising directly or indirectly from the discontinuance itself) which, if the trade, profession or vocation had not been discontinued, would have been deducted in computing for tax purposes the F64profits of the person by whom it was carried on before the discontinuance, or would have been deducted from or set off against those F64profits as so computed, and

any capital allowance to which the person who carried on the trade, profession or vocation was entitled immediately before the discontinuance and to which effect has not been given by way of relief before the discontinuance.

any expense or debit shall be apportioned between a sum chargeable under section 103 and a sum chargeable under section 104(1) in such manner as may be just;

as between sums chargeable, whether under section 103 or 104(1), for one F69accounting period and sums so charged for a subsequent F69accounting period, any deduction in respect of a loss or capital allowance shall be made against sums chargeable for the earlier F69accounting period;

subject to paragraph (b) above, as between sums chargeable for any F69accounting period under section 103 and sums so chargeable under section 104(1), any deduction in respect of a loss or capital allowance shall be made against the last-mentioned sums rather than the first-mentioned;

in remedying defective work done, goods supplied or services rendered in the course of the former trade, profession or vocation or by way of damages (whether awarded or agreed) in respect of any such defective work, goods or services; or

in defraying the expenses of legal or other professional services in connection with any claim that work done, goods supplied or services rendered in the course of the former trade, profession or vocation was or were defective;

in insuring against any liabilities arising out of any such claim or against the incurring of such expenses; or

for the purpose of collecting a debt taken into account in computing the F81profits of the former trade, profession or vocation.

an amount equal to the amount released, or

if he was entitled to only part of the benefit of the debt, an amount equal to an appropriate proportion of that amount.

in making a claim for a year of assessment under subsection (1) above he gives notice that the debt was bad in any part of that year, and

he has not given such a notice in respect of that debt in the making of any other such claim,

if relief under this section in connection with that trade, profession or vocation is claimed in respect of any year of assessment, the amount of the relief shall be reduced by the amount of any unpaid expenses at the end of that year;

for the purposes of the application of paragraph (a) above in relation to a subsequent year of assessment, any amount by which relief under this section has been reduced by virtue of that paragraph shall be treated as having been paid in respect of the expense in question; and

if subsequently any amount is in fact paid in respect of an expense in respect of which a reduction has been made under paragraph (a), that amount (or, if less, the amount of the reduction) shall be treated as a payment to which this section applies.

a person permanently ceasing to carry on a trade, profession or vocation, or

in relation to a trade or profession carried on by a person in partnership with other persons, the occurrence of an event treated under section 246(4) of ITTOIA 2005 (basic meaning of “post-cessation receipt”) as a person permanently ceasing to carry on a trade or profession.

a person permanently ceasing to carry on a UK property business, or

in relation to a UK property business carried on by a person in partnership with other persons, the occurrence of an event treated under section 353(3) of ITTOIA 2005 (basic meaning of “post-cessation receipt”) as a person permanently ceasing to carry on a UK property business.

“trading stock” has the meaning given by section 100(2);

references to work in progress at the discontinuance of a profession or vocation, and to the transfer of work in progress, are to be construed in accordance with section 101(3); and

the reference to work in progress at the time of a change of basis is also to be construed in accordance with section 101(3), substituting therein for this purpose references to the change of basis for references to the discontinuance.